Rather than jumping straight into writing bloated arguments on...

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upside_down

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24/06/21

11:08

Post #: 54037771
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Originally posted by SebbyV: ↑

It’s not - I think the new product is a positive for them, and a necessity in the face of large user growth by Klarna and Quad, but think about it:
- The company did not say the fee was higher, RBC floated the idea that it might be.
- In 2-3 years in the US, APT have not been able to sign up those retailers to be an integrated merchant at say 3.5% fee - do you seriously think they just signed them up to pay 5-6%?
- Those high volume retailers work on razor-thin margins - they would not have capacity to pay affiliate fees of that size
- If the fees were that high, every single BNPL provider would be better off ceasing the integrated merchant model at say 4%. This is not happening.
- It’s only open to trusted long-term APT customers - if the fees were that high they could open it far more broadly than that.

As said it’s a good move, but the idea that this affiliate model just trumped their entire existing business model of the past 5 years is laughable.

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Rather than jumping straight into writing bloated arguments on hotcopper, it might be worth doing a quick bit of googling. Here’s what I found for “Amazon affiliate fees”.

It all comes down to incremental revenue for these retailers, it’s not about profit/loss on an aggregate basis. That’s microeconomics 101.

The reason the existing business model in signing up merchants is still preferable is because APT does not just want to rely on in-app referrals, and can make more money by taking share from credit cards at the checkout. Integrating with merchants also gives free marketing across the merchants’ websites and lowers cost of customer acquisition.

Last edited by upside_down: I actually hold again now and sentiment: Buy 24/06/21

APT Price at posting: $132.03 Sentiment: Hold Disclosure: Not Held
8 Upvote

4 Great analysis

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